Why Trump's plan won't fix crumbling infrastructure

For the past decade or so, Americans have been inundated with propaganda about our crumbling infrastructure. Accordin...

Posted: Feb. 27, 2018 8:18 AM

Updated: Feb. 27, 2018 8:18 AM

For the past decade or so, Americans have been inundated with propaganda about our crumbling infrastructure. According to this narrative, our roads and bridges are falling apart and the only solution is more federal spending.

So how much of this money is dedicated to maintaining and restoring crumbling infrastructure? Zero; nada; not one red, white, and blue cent.

The White House says that, unlike some federal programs that are solely dedicated to new construction, the Trump plan allows state and local politicians to decide to spend their share of the funds on either new projects or maintenance. But the plan doesn't guarantee that any of the money will be spent on maintenance.

Where infrastructure is in bad shape, it is because politicians are allowed to decide how to spend infrastructure funds. And, as I have argued elsewhere, some decide to build highly visible new projects rather than maintain existing ones.

Although the Trump plan would allow states to spend their share of new infrastructure funds on maintenance, it leaves the decision in the hands of local politicians. They will almost always go for the glitz rather than the routine.

In general, our state highways, which are funded mainly out of gas taxes, tolls, and other user fees, are in good shape, while local roads, which are funded mainly out of property taxes and sales taxes, are not. Our freight railroads, which are funded mainly through user fees, are in good shape, while Amtrak and urban transit infrastructure that are funded exclusively by tax dollars are not.

Notice a pattern here? Infrastructure that is funded by user fees tends to be in good shape because managers know people will pay less if the infrastructure declines. Infrastructure that is funded by tax dollars is in poor shape because politicians would rather spend money on the next shiny new project than take care of the old ones.

The other advantage of user fees is that they tell us whether new infrastructure is needed. If users are willing to pay for more infrastructure, then it is something we really need that will produce secondary economic benefits. If they aren't willing to pay for it, we probably don't need it and maintaining it will merely be a drag on the economy.

To its credit, the Trump infrastructure plan does allow for some additional user fees. For example, it would allow the states to charge tolls for more interstate highways. This would not only help pay for maintenance and improvements of those highways but relieve congestion, saving Americans billions of dollars a year. But the plan leaves the decision to state politicians, who are unlikely to ask voters to pay tolls when they can pretend to give them something for nothing.

In general, however, not one of the new programs proposed by the Trump infrastructure plan is dedicated solely to maintenance and rehabilitation of crumbling infrastructure. As a result, it is likely that the bulk of this proposed new federal spending will go toward new infrastructure that we may not really need and can't afford to maintain.